Arbitration Agreement Archives - Page 3 of 10

August 16, 2023August 11, 2023

New Brunswick – Arbitration award not trigger for discoverability of related claim– #764

In Architecture 2000 Inc. v. Moncton, 2023 NBCA 50, a unanimous Court of Appeal summarily dismissed civil claims of breach of contract and negligence in the design and management of a building addition. While the appeal turned on New Brunswick’s limitations legislation, claims made in an earlier arbitration from the same construction project were crucial to this outcome, as explained below. The decision exemplifies problems that can arise in a dispute in which there are multiple contracts at issue, when some players are parties to some contracts but not others, and when an arbitration agreement covers only some of the disputes between the various contracting players.

August 14, 2023August 18, 2023

Alberta – Misapplication of separability principle in contract dispute – #762

Gutama Estate v Vital Property Services Inc., 2023 ABKB 436, is NOT an arbitration case and the contract at issue contained no arbitration clause. But bear with me! The case involved the alleged repudiation/termination of a shareholders agreement and the consequences to the rights and obligations of the parties as a result. The question: if the contract was repudiated/terminated, were all the parties’ rights unwound? The Court quoted from Heyman v. Darwins Ltd. (uniset.ca), the leading U.K. decision that established the common law principle of separability of the arbitration clause. The Court described Heyman v Darwins as a case that addresses the operation of an arbitration clause where the contract has come to an end: in circumstances in which the contract-terminating event did not go to the very existence of the contract, “it did not matter how the contract came to be terminated: the contract (including its arbitration clause) had existed, and the arbitration clause continued to operate….” The Court then extrapolated that concept and applied it more broadly: “[i]n other words, pre-existing and engaged contractual rights continued to operate despite the later termination (by whatever means) of the contract”. Applying that reasoning to this case where the shareholders agreement was alleged to have been repudiated or terminated by its own terms, the Court said that any such termination did not, “eclipse the agreement completely ie render it meaningless for all purposes and at all times… [i]nstead, crystalized rights and obligations would continue.” In other words, “the parties would be discharged from future obligations, but remain bound by rights and obligations that have accrued through partial performance”. Thus the Court imported part of a uniquely arbitration law principle with a specific public policy purpose, separability, into general contract law.

August 3, 2023August 1, 2023

Ontario – Title of proceedings may be amended in recognition and enforcement proceeding – #760

IC2 Fund v Wires, 2023 ONSC 3879 addresses: (1) whether it is appropriate for a party seeking to enforce an international arbitral award to correct the title of proceedings in an enforcement proceeding where both abbreviated and formal names were used interchangeably in the arbitration; (2) whether an applicant using an abbreviated name has standing; and (3) whether a party resisting enforcement can do so on the basis of an arbitrator’s alleged partiality after such allegations were addressed in the arbitration, which decision was not challenged. Here, the applicant (the respondent in the arbitration) brought an application to enforce an arbitral award (the “Award”) relating to its costs of the arbitration. In the title of proceedings in the notice of application, the applicant used an abbreviated corporate name. In the absence of confusion around the party’s identity, including because the respondent (the applicant in the arbitration) had used both the formal and abbreviated names, the court granted leave to amend the notice of application to reflect the full corporate name and resolved the standing issue on the same basis. The court also recognized the Award, rejecting the allegations of partiality of the arbitrator. The respondent had previously made allegations in the arbitration about the arbitrator’s lack of impartiality, which were rejected. The respondent did not challenge this decision.

August 2, 2023August 1, 2023

Alberta – No discretion under Rules to correct procedurally flawed appeal of award – #759

In Kwadrans v Kwadrans, 2023 ABCA 203, the Alberta Court of Appeal considered the appeal of a chambers judge’s order that struck the appeal of an arbitration award in a family law dispute. The chambers judge held that the appellant, by filing a Notice to Attend Family Docket Court instead of an originating application, did not properly commence his appeal of the arbitral award within 30 days as required by the Alberta Arbitration Act, RSA 2000, c A-43 (“Arbitration Act”). The chambers judge issued an order striking the appeal. The Court of Appeal upheld the chambers judge’s finding and dismissed the appeal. Kwadrans makes clear that although the Arbitration Act is silent about how an appeal is to be commenced, rule 3.2(5) of the Alberta Rules of Court, Alta Reg 124/2010 (“Rules of Court”) fills that gap and requires that an appeal be made by originating application. Further, based on the authority of the Alberta Court of Appeal in Kwadrans and Allen v Renouf, 2019 ABCA 250, the Court does not have discretion to cure a procedural deficiency if the effect would be to extend a limitation period under the Arbitration Act. Kwadrans addresses issues that may arise as a result of the interplay between the Rules of Court and the Arbitration Act generally and has application to appeals of commercial arbitral awards.

August 1, 2023August 1, 2023

Ontario – Courts will also enforce agreements in favour of court proceedings – #758

In Eurofins Experchem Laboratories, Inc. v BevCanna Operating Corp., 2023 ONSC 4015, the Court dismissed an application by Defendant BevCanna Operating Corp (“BevCanna”) for a permanent stay of the action or alternatively, a permanent stay of any claims caught by the arbitration clause in the agreement between BevCanna and the Plaintiff, Eurofins Experchem Laboratories, Inc. (“Eurofins”). The Court found that Eurofins’s claim sought recovery of unpaid fees under the parties’ contract, even though it also included claims for breach of fiduciary duty and unjust enrichment. Claims for unpaid fees fell within an exception to the mandatory arbitration clause. It permitted (but did not require) claims for unpaid fees to be brought in the courts. In reaching this conclusion, the Court considered whether the essential character, or pith and substance of the dispute, was covered by the arbitration clause. This focus ensures that parties are held to their agreement and avoids attempts by clever counsel to plead their way around an arbitration clause.

June 22, 2023June 19, 2023

Ontario – Doctrine of separability cannot apply where contract nonexistent – #749

In Ismail v. First York Holdings Inc., 2023 ONCA 332, the Court of Appeal for Ontario upheld an order denying the appellant’s motion to stay an action in favor of arbitration under s. 7 of the Arbitration Act. The motion judge had denied the order because the motion was based on an arbitration clause in an agreement that was never legally formed. This deprived the alleged arbitration clause of any legal force. This case illustrates one of the rare instances to which the doctrine of separability of the arbitration agreement cannot extend.

June 8, 2023August 8, 2023

Alberta – “Participating in” not same as “taking a step in” an arbitration – #745

In Dow Chemical Canada ULC v NOVA Chemicals Corporation, 2023 ABKB 215, Justice Wooley dismissed an application by Dow Chemical Canada ULC (“Dow”) for an order declaring the invalidity of the arbitration pursuant to Section 47 of the Arbitration Act to enjoin an arbitration between the parties. That provision requires that the party seeking the order has “not participated in the arbitration.” The Court found that Dow did participate in the arbitration and the case provides a useful framework for what it means to “participate” in an arbitration.

June 6, 2023June 20, 2023

Ontario – Competing “jurisdiction” clauses result in application for stay being dismissed – #743

In RH20 North America Inc. et al v. Bergmann et al, 2023 ONSC 2378, the moving defendants brought both a motion under Rule 21 striking out certain of the plaintiff’s claims as disclosing no reasonable cause of action, and an application for a stay for want of jurisdiction on the basis of arbitration clauses in their underlying contracts with the plaintiffs. They met with divided success. While granting relief on the Rule 21 motion, Justice Valente dismissed the stay application on a variety of grounds, including that there were competing arbitration and jurisdiction clauses and that there was an attornment to the court’s jurisdiction as a result of bringing the Rule 21 motion.

May 24, 2023May 24, 2023

Ontario – Peace River “arguable case” standard applies to ICAA stay motion – #739

Husky Food Importers & Distributors Ltd v JH Whittaker & Sons Limited and Star Marketing Ltd, 2023 ONCA 260 addresses the standard of proof that a party seeking a stay of proceedings under s. 9 of the International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sch. 5 (“ICAA”) must meet in order to establish the existence of an arbitration agreement that grounds the stay of proceedings. The Court of Appeal found that Peace River Hydro Partners v Petrowest Corp, 2022 SCC 41 supersedes the stay analysis articulated in Haas v. Gunasekaram, 2016 ONCA 744.

May 10, 2023May 26, 2023

New Brunswick – When is an appeal not an appeal? – #736

In New Brunswick Highway Corporation v. MRDC Operations Corporation, 2023 NBCA 19, the Court of Appeal of New Brunswick (the “Court”) dismissed the appeal of a decision denying an appeal against an arbitral award. The Court found that the arbitration agreement did not grant the parties an automatic right of appeal, and denied leave to appeal pursuant to section 45 of the Arbitration Act, RSNB 2014, as no extricable questions of law were present. The Court cautioned against finding extricable errors of law in a case such as this involving contractual interpretation of the arbitration agreement. The decision turned on the interpretation of the arbitration agreement, which provided both for an appeal and for no appeal.